The UB group aimed to retire some debts from the sale proceeds. In May 2007, UB had raised a debt of 595 million for buying Scotch major Whyte & Mackay. The group is the third largest spirits maker in the world, with overall sales of 60 million cases a year. United Spirits has over 150 products in its portfolio and is largest spirits maker in India.
It hasnt proved possible for Diageo to resolve points of difference between the two parties, principally valuation, the British company said in a statement. The company said it remains confident about the long-term prospects of the Indian market and will continue to pursue its own brands potential in the country, according to a Wall Street Journal report.
Earlier on Tuesday, United Breweries Ltds chief financial officer Ravi Nedungadi told agencies the company wasnt talking to anyone else about possible investments. Our business is growing at 18-20% annually. We are on course to turn the No. 2 firm by the end of the year, he said. We decided the strategic stake sale can be addressed leisurely when the firm commands higher valuation, he said.
United Spirits, a part of the United Breweries Ltd, headed by Vijay Mallya, sells spirits such as McDowells No. 1, Royal Challenge and Antiquity. Diageo, meanwhile, is the worlds largest spirits maker with brands such as Johnnie Walker whisky, Smirnoff vodka and Gordons gin.
United Spirits, part of Indias top liquor maker, the UB group, had talked with KKR, Blackstone and Capital International about selling a stake.
Mallya cut down the companys debt of Rs 6,500 crore by Rs 1,000 crore in June through sale of 10.3 million shares from the treasury stock of 18.6 million shares.